What is the difference between "vested amount" and "account value" on the 401k?

At most companies that contribute to your 401k, when you first working at the company, the company's contributions do not, at first, truly belong to you. Your rights to the company's contributions come after you have been there for a while. When you obtain the rights to the company's contributions, this is called 'vesting'.





For example, the company may say that after 1 year of employment, you are 20% vested, after 5 years, you are 100% vested. This means that if you leave after 1 year, you can only take with you 20% of the company's contributions (plus any gains proportional to that 20%). If you have a statement at the end of the 1st year, in this example, the 'vested amount' will reflect your contributions plus 20% of the company's.





In any case, your own contributions always belong to you immediately.





After you are 100% vested, the 'vested amount' and 'account value' should be the same.
What is the difference between "vested amount" and "account value" on the 401k?
The vested balance is how much you actually have earned on a particular day. Your company has a schedule for that.


Example: 1 year 20% vested


2 year 40% vested


3 year 60% vested


4 year 80% vested


5 year 100% vested





Your account balance is your total account balance including amounts that may not have accrued to you as of yet because of company policy due to the vesting schedule.
Reply:In a nutshell, the account value consists of [1] all of your contribution and [2] ALL of your employer's match. The vested amount, on the other hand, consists of [1] all of your contribution and [2] a PORTION of your employer's match. That portion ranges from 0% to 100%, depending on the amount of time you have been with the company. Different companies have different policies regarding length of employment vs. vested percent.





Typically, you become 100% vested after 5 years of employment, meaning that if you choose to resign after 5 years, you will get all of your contriution and 100% of the employer's match. If you resign before the 5 years, you will get all of your contriution and less than 100% of the employer's match.





The reason is that employer's match is essentially "free" money. Before they give you "free" money, they want to make sure that you have given it enough service.
Reply:The vested amount is how much you would walk away with if you quit working for the company today. It is calculated as a percentage of the 'account value'. The longer you work for the company the higher the 'vested' percentage will be.


Your HR rep should be able to give you the vesting schedule.





The account value is the actual value of your holdings.
Reply:Account Value is the amount of the 401K.


Vested is what is available to the client.


Kinda like waiting for a check to clear.